Flipping cars consists out of buying cars solely to sell them for profit. As such, a car-flipping career is possible, but there are lots of reasons which make it more or less financially feasible. You ought to have specific skills in order to make it a true career, and not many people do.
That being said, the vast majority of people flip cars as a hobby or as a source of additional income. Some do it because they love spending time buying cars, restoring them, and bringing them back to their old glory, while others just see it as a lucrative side hustle.
Regardless of which one of these you might be, you must spend a lot of time investigating and wanting to learn about different models and the market itself. A true ‘’professional car flipper’’ knows which cars are profitable, and which ones are not.
If you are only starting with a small budget, be sure to buy a car after you’ve successfully arranged everything necessary. You should also take into account that different states have different regulatory requirements to sell a certain quantity of cars per single year.
Qualities and expertise of a successful car flipper
What makes a good car flipper? Is it financial background, patience, willingness to risk, ability to close a deal fast? All of these are essential for a good car flipper, but there is more to the story than just money and wits.
First of all, you need money, but not the kind of money you think. Many car flippers start with just a few hundred $ because it’s more about the car than it is about money. Secondly, try to get a thorough understating of how the market works and which cars are considered undervalued.
Car flipping in its essence is relatively similar to gambling because it requires you to put a certain amount of money into something that might, or might not pay off. A good car flipper is always aware not to put all of the apples in a single basket which always leaves you some room if things do go south.
You should also be in contact with experienced car detail companies and body shops which can act fast with a satisfiable quality. If you own a repair shop or a detailing company yourself, it makes it way more profitable and easier to flip a car.
Starting as a car flipper
Imagine yourself on a rainy boring afternoon strolling through various online listings of used cars solely for the fun of it. If you are such a guy, you have quite a bit of free time at your disposal and you can also potentially be a very successful car flipper if you play your cards right.
It’s best to start with a small, yet substantial budget that enables you to buy a car someone might actually consider as a daily driver. It’s always best to find popular cars which are not mechanically or electronically impaired, but rather ones that are just unloved and uncared for.
After you’ve successfully located such a car, do your math as to how much you will need to spend in order to turn the car into a purchase-worthy asset. Always consider time and all the additional costs such as keeping the car for some time before selling it.
If everything checks out and the profit margin is decent at the very least, try to close the deal and immediately put the car up for sale. Always use good pictures, long descriptions, and most importantly, always acquire vehicle history reports.
Car flipping regulations
Another thing to keep in mind is how your state regulates car flipping because some states limit you from selling more than only a handful of cars per year if you don’t have a dealer’s license. Other states are a bit more flexible, and some of them enable you to sell more than 10, or even 15 cars per year.
It’s also worth mentioning that a dealer’s license is not an easy license to acquire because it also depends on specific state laws and it can cost upwards of $25k in some cases. Besides the license itself, some states require you to have a dedicated commercial asset from which you run your business.
To keep it short, just try to investigate how and what your state enables you to do and under which circumstances. If you don’t obey these rules you can get fined for obscene amounts of money and also face serious criminal charges.
Which cars are most profitable to flip?
The ones that almost no one can get a hold of anyway. Cars like the Ferrari LaFerrari are prime examples of such cars because from new, these Ferraris would run you for about a million $ without options.
However, the demand for these cars is way higher than what the 499 units produced can satisfy, and there are loads of rich Ferrari enthusiasts and collectors who simply want a LaFerrari. As such, there were instances where people paid a million or two over MSRP just to buy a used LaFerrari.
What else can be flipped for a decent profit?
If you have already achieved your goals in car flipping, and you want to flip whatever else can be flipped, you should consider flipping luxury watches. Some brands like Rolex, Patek, Richard Mile, Audemars Piguet, and many others are often sold for more than what the initial buyer originally paid for.
On a much smaller scale, people also tend to flip shoes from brands such as Jordan, Nike, Adidas, or Rebook, and many other higher fashion brands in other clothing categories.
Why I should not flip cars?
If car flipping is illegal in your state and the dealer’s license costs a fortune, you should just leave it be and do something else. Furthermore, if you are not interested in cars all that much and you don’t want to get involved any further, it’s also best to skip car flipping.
If you are an impatient man, try to look for a different career because car flipping can be stressful and sometimes seem like mission impossible. Earning money without doing anything does not work if you do everything legally, car flipping is no different because it requires dedication, knowledge, and risk.